https://www.taxtmi.com/caselaws?id=7470 For section 23A of the Income-tax Act, 1922, commercial profits are assessed on commercial principles, and a bona fide reserve created against a probable liability may be excluded even before the liability has crystallised. On that basis, the reserve of Rs. 60,000 set aside against a likely guarantee claim was excluded from commercial profits. By contrast, the farm-related loss was not shown to be a legitimate business loss or linked to the assessee's stated objects, so its inclusion in commercial profits was upheld. en-us Wed, 19 Feb 1969 00:00:00 +0530 Fri, 20 Feb 2009 12:52:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7470 For section 23A of the Income-tax Act, 1922, commercial profits are assessed on commercial principles, and a bona fide reserve created against a probable liability may be excluded even before the liability has crystallised. On that basis, the reserve of Rs. 60,000 set aside against a likely guarantee claim was excluded from commercial profits. By contrast, the farm-related loss was not shown to be a legitimate business loss or linked to the assessee's stated objects, so its inclusion in commercial profits was upheld. Case-Laws Income Tax Wed, 19 Feb 1969 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7470